In re VEON Ltd. Securities Litigation

Background

Lead Plaintiff Boris Lvov brought a securities class action against Veon Ltd., formerly known as VimpelCom Ltd. He alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5 on behalf of people who purchased VimpelCom American Depositary Shares during the stated class period and held them through at least one corrective disclosure.

The court was considering the defendant’s motion to dismiss new portions of Lvov’s Third Amended Complaint. The new pleading added three alleged false statements and six alleged corrective disclosures relating to events involving VimpelCom’s Uzbekistan operations, including allegations concerning other telecommunications companies, alleged bribes, and investigations or public statements about those matters.

Newly Pleaded False Statements

The three new alleged false statements concerned: a statement at an August 2012 earnings call that VimpelCom operated in accordance with local law; a December 2012 statement that VimpelCom followed international anti-corruption law; and a statement in a June 2011 Form 20-F attributing growth in VimpelCom’s Uzbekistan subscriber base to expanded network coverage and competitive prices.

The court applied the five-year statute of repose in 28 U.S.C. § 1658(b)(2). A statute of repose is a firm deadline that runs from the alleged wrongful act itself. The court held that the deadline runs from the date of each alleged misstatement, does not receive equitable tolling, and does not allow a newly alleged misstatement to relate back to an earlier complaint when the new claim would otherwise be time-barred.

Because the Third Amended Complaint was filed on March 1, 2023, the court concluded that claims based on misstatements made before March 1, 2018 could not be newly added if they had not appeared in the earlier complaints. The three new alleged misstatements were therefore time-barred.

Newly Pleaded Corrective Disclosures

The six new corrective disclosures concerned events from January 2013 through November 2015, including statements or investigations involving TeliaSonera, Telenor, Takilant, and alleged bribery-related conduct. Lvov alleged that these events contributed to declines in VimpelCom’s share price and supported loss causation—the required connection between the alleged fraud and the investors’ economic losses.

The court stated that the Second Circuit had not yet decided whether newly added corrective disclosures may be pleaded despite the statute of repose. It found that the new disclosures plausibly supported Lvov’s loss-causation allegations because, taken together, they revealed specific and concrete facts about VimpelCom that contributed to the declining stock price.

Ruling

The court granted the defendant’s motion to dismiss the newly pleaded false statements with prejudice. It denied the defendant’s motion to dismiss the newly pleaded corrective disclosures without prejudice. The parties were directed to file supplemental briefing concerning the corrective disclosures in light of the dismissal of the new misstatements. Lvov’s letter brief was due October 7, 2024, and the defendant’s reply was due October 14, 2024.